Exploring the Challenges and Opportunities of SMEs' Transition to Circular Economy: Case Study

Abstract

The principles of reduce, reuse, and recycling form the basis of the Circular Economy (CE) framework. Organizations can gain a competitive edge by adopting CE, which is in line with the growing demand from stakeholders for more sustainable business practices. SMEs face several challenges to adapt CE for their business models. This paper presents the findings of a case study that examined an Australian SME's successful adoption of CE principles. The study outlines the challenges and opportunities involved in a CE transition by analyzing the data gathered through semi-structured interviews. The transition of CE is impeded by several significant challenges, including ambiguous governmental policies, customers indifference, high start-up costs, and technological barriers. However, SMEs have the potential to reap benefits by embracing the adoption of CE practices, provided they successfully navigate the challenges associated with it. By doing so, they can effectively bolster the brand image, foster more interaction with stakeholders, mitigate glasshouse gas (GHG) emissions, and distinguish the market offerings.